SHOCK INTERACTIONS, COPING STRATEGY CHOICES AND HOUSEHOLD FOOD SECURITY

Abstract

Agriculture-based livelihoods in developing countries are often challenged by a multitude of unforeseeable shocks, but economic research mostly focuses on single shocks. This paper investigates how climate, health, pest and price shocks individually and in combination relate to farm households’ coping strategy choices. First, we use binary probit models to examine how interactions from coinciding shocks relate to coping strategy choices. Next, we assess how coping strategies relate to household food security in a recursive framework. We find that when shocks are considered individually, the nature of shocks and their duration affect the likelihood of using savings. However, when climate shocks interact with health, pest or price shocks, there are incremental effects that increase the probability of depleting household assets to cope. Our findings suggest that governmental and non-governmental organizations should support rural farm households in managing the effects of multiple shocks through the provision and enhancement of markets for labour, insurance and outputs as well as formal safety nets. This support will help them to protect their assets and foster long-term wealth creation for escaping chronic poverty and food insecurity.